Posts Tagged ‘IFA

Living up to host city New Orleans’s reputation for revelry and rapture, this year’s annual IFA Convention was nothing less than mardi gras worthy. Having spent the last couple weeks recovering and catching up after franchising’s annual hoorah, the Weise team has sorted through the swag to find our most memorable takeaways. Among these, franchisors’ lingering hesitation towards technology stands out.

In February 2014, Facebook celebrated its 10th anniversary, hardly qualifying it as groundbreaking. Social media’s rapid expansion and continuing evolution of the digital sector leaves few hard and firm rules. Although social media is the go-to reference for digital marketing, this is really just the tip of the iceberg. Buzz words including SEO, PPC, and CRMs are all a part of the marketing and sales mix. With so much going on in today’s race to ‘be found,’ it’s little wonder the technological world is a maze of anxiety for many.

Yet, the key many franchisor’s have yet to discover is the positive impact adopting these trends can have from both a marketing and operational standpoint, ultimately increasing their bottom line. According to David Mihm, Director of Local Search Strategy at Moz, “Brands are how you sort out the cess pool of the Internet.”

With that in mind, here are some nuggets of know-how, common confusion and other common threads we gleaned from the conference:

Google + Still one of the lesser used and understood social media platforms, Google + directly impacts your brand’s SEO. Major areas to make sure are updated and complete include business info, link to your website and location information. This info will appear higher in search results because of the link to SEO, content should be largely business focused.

Location Pages Another tidbit we kept hearing repeated was the importance of location pages. This is the easiest way for search engines to validate a company’s authenticity so make sure your info is on several different ones (Google, Bing, Yahoo, Yelp). Also, make sure it’s accurate! This is an easy first step for promoting online presence.

Facebook- Franchise sales vs. Consumer Sales Whether Facebook should be used for both consumer and franchise sales—and whether these should be separate pages—was a hotly debated topic. Although a “one size fits all” answer may never exist, it is important to remember any potential franchisee will interact with your brand several times before revealing themselves as a prospect, making high quality content more important than ever.

Content Development Discussions revealed many brands are struggling with content development. Whether intended for social media, blogs, newsletters or websites, this directly impacts SEO. In today’s world of content overload, quality and variety is key to moving up in search results. Another important nugget to mull over: hiring an outside agency to manage content development is often more effective than relying solely on in house talent. This is, after all, what these agencies do best.

A fitting sequel to IFA, FranTech—a conference exclusively devoted to the technological sector of franchising—is coming to Denver next month. These two days offer another chance for marketing managers to learn best practices, confer with other franchisors and find vendors. I guess we’ll see many of you in Denver.

Benchmarking KPI (Key Performance Indicators) through IFA ‘on track’ system is long over due. Props to IFA for making this happen and highlighting it at the conference.

Financing is still the biggest hurdle to overcome for franchise systems to grow. The IFA continues to push for political and financial movement in this area, while many franchisors look for innovative financing options of their own.

Integration of marketing tools is essential. Communication is no longer filtered through the media and our messages can go direct to the consumer. Thus, we need tighter control over what we say about our companies.

A great way to get into the social media game is to use store locator maps on websites to help drive foot traffic. But, if you are using this tool, it is essential that locators are accurate and complete. The franchisor should own this operation, not the individual franchise owners.

In 2010, there was a lot of discussion about using social media effectively in the world of franchising. In 2011, the entire conference could have been dedicated to this topic (@davemurr of Re Group). Franchise systems are increasingly savvy about driving consumers to their locations through mobile and location-based marketing, but still unsure how to use the same tools to sell franchises. Luckily we heard from some great systems that they are developing leads and closing sales based on their social media efforts. Social media is here to stay and it sounds like that message has been heard loud and clear by most franchise systems.

A lead is a lead. A conversion is a sale. Franchisors are now more interested in the quality leads they can generate that actually close a deal, rather than simply how many leads they can get from any one source. The prevailing question now is, “How do I close the sale?” as opposed to “How do I get a lead?”

Franchisors that still don’t believe in the value of social media probably have the wrong mindset. Social media is not pitching products and services; it is a relationship-building tool.

When it comes to social media, like any other marketing outreach initiative, you need a plan that is realistic to execute and based on a legitimate goal. It also needs to be a sustainable plan because social media is not considered authentic unless it is ongoing.

Separate training and support operational functions. Good professional trainers can get a franchisee started with excellent training. However, those skills are not necessarily successful for a franchisee operating for a while. They need a different level of support. Both of these functions need distinctive skill sets and most likely different people working on them. But the increased focus on the right area will increase franchisor profitability (@Mike_Walls of Caring Senior Service).

Franchising industry must integrate social media with traditional methods and processes (@PaulSegreto of franchisEssentials). Social Media is a vital channel for growth both at the franchisee and the franchisor level (@JackMonson of Engage121).

At Faegre & Benson, Brian Schnell is the lead corporate franchise lawyer for more than 80 franchisors. He helps franchise systems navigate the legal process of expanding internationally, including understanding the ramifications of international marketing and sales decisions and how those decisions can effect your established brand.

Brian has taken the time to provide the readers of The Side Note insight into his experience.

Many U.S. franchisors are looking to overseas expansion as a way to continue growth for their franchise brand and system. Franchisors who have successfully expanded internationally always emphasize the importance of finding the right international franchise candidates, rather than emphasizing getting a deal done and collecting a big upfront fee. In order to maximize the opportunities for successful international deals with long-term success, franchisors are encouraged to focus on the following principles:1) Award (Do Not Sell) International Franchise Rights

The key distinctions between awarding and selling are the attitude and resulting relationship both parties have once they sign an agreement. If the international franchisee buys the rights to their country or a territory within their country, they likely believe they own those franchise rights. This is particularly true when the franchisor tells the international franchisee to modify the operating system for local customs. This purchase mentality is reinforced if the international franchisee has master franchise rights and immediately begins subfranchising. Subfranchising often happens before the master franchisee truly understands the business, the marketplace and in general, what it means to be a franchisor.

Contrast this sell/buy mentality with awarding franchise rights. The difference starts in prospecting. It needs to be clear in the beginning that the international franchisee will own its business assets, but those business assets include a license to use the franchisor’s trademarks and operating system, which is being awarded to the franchisee. The smart franchisor focuses its presale discussions with the international candidate on the franchisor’s brand opportunity in the country, the roles that the franchisor and franchisee will play in rolling out the brand and the importance of collaborating in building the brand and the brand’s customers. This subtle difference channels both the franchisor’s and franchisee’s efforts on mutually working together, rather than the behaviors that ensue when the international franchisee believes it has purchased something.2) Build an Emotional Bond with International Candidates

With the appropriate awarding mentality in place, the franchisor can spend less time on selling its franchise opportunity and more time on determining if the international candidate is prepared to make an emotional commitment. Successful brand building and successful franchise building is more about emotion than pure economics. Most international franchisees have the financial strength to do the deal, but if the international franchisee is not fully invested emotionally, than the chances of long-term success in the country are greatly diminished.

Too many franchisors overlook this key issue in their search for international candidates. Statistics show that most international franchisees fail to meet development schedules throughout the life of the deal. One reason this occurs is that the international candidates have been sold, not awarded, their rights. No emotional bond exists between the franchisor and franchisee. Therefore no emotional bond exists between the franchisee and the brand. If the emotional connection is not established in the beginning, the international franchisee struggles, loses confidence and interest, and likely makes a half-hearted effort in developing the brand in the country.

3) Establish the Importance of Your Culture and Brand

The franchisor must emphasize the culture of the company and the role it plays in the franchise system, both domestically and internationally. An international franchisee can properly change certain aspects of the operating system when it expands in its country, but they should not change the franchisor’s culture. Further, a franchisor’s culture is akin to the brand culture, as this is the foundation for promises that are made to brand customers (we promise/we deliver). The emphasis on the culture is often overlooked in the international sales process, when it should be a core component. If the international franchisee does not understand and embrace the franchisor’s culture or brand, frustration and miscommunication will result and breakdowns will occur.4) Focus on the Mutual Fit

During the initial conversation with an international candidate, the franchisor should clearly explain the objective is for both parties to determine if the fit is right. Is the candidate a good match for the franchisor and is the franchisor the right fit for the candidate? In the end, if both parties have determined a mutual fit exists, then the next steps of the relationship (building, expanding and operating the brand in the country) take on a collaborative tenor. Furthermore, when a challenge arises (and challenges will indeed arise), the established relationship will allow the parties to work through those challenges quicker and more collaboratively.5) Be Prepared to Walk Away

If the focus is in on mutual fit, then the parties should have an understanding that if at any time one of the parties determines the fit is not right, then both parties will part ways and wish each other the best. International failures are often results of signing deals instead of walking away. Often the franchisor gets too focused on finalizing a deal and receiving the upfront franchise fee that warning signs against the match are missed or ignored.

The bottom line is that successful international franchisors understand the critical nature of the approach they use in their development. The franchisor should design an approach and structure conversations with potential franchisees that focus on fit above all else.

About Brian Schnell

Brian Schnell is a leader of the Faegre & Benson franchise practice. He counsels both emerging and mature franchisors in a variety of industries on all aspects of their franchise programs. He is the lead corporate franchise lawyer for more than 80 franchisors, ranging from companies with thousands of locations worldwide to companies in the initial stages of building their franchise systems. Brian is a past chair of the International Franchise Association Supplier Forum and a member of its Legal and Legislative, Awards and Membership committees. As the first male to receive the IFA Women’s Franchise Committee Crystal Compass in 2009 based on his leadership in franchising, he is recognized nationally as a leading franchise lawyer and is a frequent speaker and author on franchising topics.

Last week San Antonio was taken over by several thousand representatives from the franchise industry at the 50th Annual International Franchise Association (IFA) Convention. It was my second time attending the convention, and it has certainly solidified my belief in this lobbying organization. As a small business owner myself, I feel and understand many of the business issues and concerns that franchisees have. And having spent much of my career working with or in large organizations – some franchises, some not – I also feel and understand the concerns of many of the franchisors.

It was once again a great great opportunity to learn from the speakers, exhibitors and other attendees.

Here are my top ten takeaways from the convention:

Innovation is alive and well in America. The number of people I met with new and emerging franchise systems was both empowering and exciting.

You have to look at the big picture when making the best business decisions for the company as a whole – don’t make the mistake of getting bogged down in one small detail. Thanks Steve Greenbaum, chief executive officer, PostNet, for this great bit of information.

One of the most eloquent phrases of the convention: Prayer is the most under utilized resource in business. I am ashamed to say I can’t give proper credit to the speaker, because I was so struck by the many levels of this statement that I neglected to note who said it. If you were at the prayer breakfast and know the author, please comment below.

Adding social media into your marketing mix can significantly drive ROI for franchise sales. I already believed this concept, but it was great to receive confirmation from a numbers-based case study by Sean Fitzgerald of Wireless Zone.

Just as important as the things you learn that you can do, are the things you learn that you can’t do. It was so inspiring to be told, “What I got out of that session on international expansion is that we are clearly NOT ready for international expansion.” I won’t expose the person who made that statement, the branches of her company can continue to spread domestically for a few more years.

Since George Bush (one of the convention’s keynote speakers) left office, his presentation style has become much more dynamic. And he still has strong beliefs with which business owners clearly resonate – including the fact that lowering taxes helps create jobs. I look forward to hearing more from him and reading his new book (due out in November).

Watching the Super Bowl on a theater screen is the ONLY way to watch the big game. Thanks to all the sponsors of FranBowl for a great night!

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